Scullin, James Henry (1876 - 1953)

SCULLIN, JAMES HENRY (1876-1953), grocer, newspaper editor and prime minister, was born on 18 September 1876 at Trawalla, Victoria, fifth child of John Scullin, railway platelayer, and his wife Ann, née Logan, Irish Catholic migrants from Derry.

James was educated at small state schools, at Trawalla in 1881-87 and at Mount Rowan, near Ballarat, until about 14, then at night school in Ballarat. He made good use of the public library, reading avidly, including Irish writers and many of the British classics.

More active in the Catholic Young Men's Society than in the Australian Natives' Association, he developed debating skills, leading to a thirty year association with Ballarat's South Street Society competitions as a successful contestant and respected adjudicator.

James had various part-time manual jobs in the Ballarat district until his mid-twenties. Then for ten years he ran a grocer's shop at Ballarat for James McKay & Sons. About 1903 he joined the Political Labor Council and helped in Labor's campaigning in State elections.

In 1906 he was Labor's candidate for Ballarat in the Federal election against Alfred Deakin, the prime minister. He then became a political organizer for the Australian Workers' Union, helping to form branches of the P.L.C. in the western half of the State, and publicizing the Labor cause.

On 11 November 1907, in St Patrick's Cathedral, Ballarat, he married Sarah Maria McNamara, a dressmaker born in Ballarat of southern Irish parentage; they had no children.

Scullin won the south-west Victorian seat of Corangamite at the 1910 Federal elections, when Labor under Fisher became the first party to win a majority in both houses of parliament.

Scullin quickly impressed with his abilities. He spoke frequently, on a wide range of issues, but concentrated on moves to increase the powers of the Federal parliament and on measures such as a land tax.

A Leading Opponent Of Conscription

He lost Corangamite in the 1913 elections, then became, until 1922, editor of a Labor daily, the Ballarat Evening Echo. In 1916-17 he was a leading opponent of conscription.

At Labor's special interstate conference in Melbourne in December 1916 he moved the motion to confirm the expulsion of all who had supported conscription for overseas military service.

At the State annual conference of 1917 he spoke forcefully but unavailingly against the move to abandon Labor's commitment to compulsory military service for home defence.

In 1918-19 he was president of the party's Victorian branch. At the interstate conference in Perth he persuaded delegates to maintain Labor's support for compulsory training, although that policy was later abandoned.

In 1918 Scullin unsuccessfully contested a by-election for Corangamite. He became more radical and inflammatory, especially in his assessments of the war and in his support for the Irish struggle against British rule.

At the Brisbane interstate conference in October 1921 he was prominent in persuading the party to adopt the socialization objective.

Scullin was endorsed for Yarra and elected in 1922, following the death of F. G. Tudor. This seat he held until 1949, moving home from Ballarat to Richmond.

As soon as he re-entered parliament he plunged into the controversies over the industrial legislation of the Bruce-Page government, and its changes to Federal-State financial relations, became an authority on taxation and began to voice concern over the state of the economy.

In March 1927 he became deputy leader, following Frank Anstey's resignation.

Scullin had mellowed on some, but not all, issues since his firebrand, pro-Irish, socialist phase of the early post-war years. Within the framework of his commitment to Labor he held other fundamental beliefs. He remained a devout Roman Catholic, some of the Church's teachings, for example Rerum novarum, influencing him on questions of social justice.

An Australian nationalist, he preferred unification to the Federal system. He was a strong supporter of the White Australia policy and of high protection for manufacturing industries.

A Man of Decent Character

Scullin was of medium height and trim build. He had handsome, regular features, which afforded cartoonists little scope for caricature. Several times while party leader he suffered bouts of ill health, but recovered well until the development from 1935 of serious illnesses.

A busy public life left him little time to read fiction, although his interest remained. He played the violin, but was little interested in art, although his wife painted as a hobby.

He was somewhat puritanical, which influenced his attitude towards literary censorship, but left him generally opposed to political censorship. His public life was studded with references, even by political enemies, to his decent character.

No whisper of any scandal ever touched him, which distinguished him from some other Labor politicians. He had modest tastes. While prime minister he declined, as an economy measure, to live in the Lodge, and retained a modest home in Richmond.

He was over 60 before he bought a house, at Hawthorn, which could be termed comfortable. He was a non-smoking teetotaller. He played bowls, but in adult life took little interest in other sports.

In 1927 Scullin began a remarkable series of speeches attacking the government's economic policy. His arguments partly paralleled those of Edward Shann's brief, prescient The Boom of 1890—and Now.

Scullin stressed the dangers in the adverse trade balance and the growing external debt and, alone among parliamentarians, gave an essentially accurate economic forecast for the coming years.

Australia's First Catholic Prime Minister

On 26 April 1928 he succeeded Matthew Charlton as Labor leader. The party was in its normal state of disharmony, as left-wingers and moderates denounced each other.

There were two Labor parties, said one commentator, 'sundered as widely as the poles in ideals and purposes and methods'. Scullin already had clashed with J. T. Lang and had been involved in the thankless task of trying to restore unity between hostile factions in the New South Wales branch.

Despite internecine rivalries and strikes, Scullin gained eight seats at the 1928 elections. In 1929 economic troubles intensified, and strikes increased, but when the ill-judged attempt by Prime Minister Bruce to dismantle the Commonwealth arbitration system precipitated an early election, circumstances strongly favoured Scullin.

On 12 October he led Labor to a sweeping victory, with 46 of the 75 full-voting seats in the lower house. He thereby became Australia's first Catholic prime minister, and the first native-born Labor prime minister. His ministry of thirteen included the deputy leader, E. G. Theodore, as treasurer.

Scullin became prime minister as the New York Stock Exchange crashed, which attracted minimal attention in the Australian press, at the time more concerned with domestic economic troubles. His forecasts were being vindicated.

He was appalled at the desperate state of the economy he inherited which was encumbered by debt, growing unemployment and slumping export prices. He faced various constraints in devising a policy to deal with the faltering economy.

There was an established body of opinion as to what constituted sound finance. Scullin himself had wisely if unavailingly advocated 'sound' financial and economic policies in 1927-28. Orthodox views on credit expansion were held even more rigidly by Sir Robert Gibson, chairman of the Commonwealth Bank Board.

The government lacked the legislative power to insist that Gibson implement its policy, for example, on credit expansion, and the size of the note issue was also restricted. Amending legislation could not be passed without the approval of the National and Country parties, for the Opposition controlled the Senate.

A Deteriorating Economy

Scullin's first months as prime minister were dogged by a lockout of miners on the northern coalfields of New South Wales. He failed in several moves to redeem an unwise election promise by Theodore to have the mines quickly reopened, paying the wage rates stipulated by the men.

When the miners were forced back to work on the employers' terms Scullin was criticized, unreasonably, for this outcome, which was the result of market forces.

By the end of 1929 he had some small achievements to his credit, such as the suspension of compulsory military training. He raised tariffs on imports, abandoned the gold standard, increased social service payments and reduced assisted immigration.

But the economy continued to deteriorate and by March 1930 parliament faced 'depression without parallel'. To reduce the adverse balance of trade Scullin raised tariffs further and launched a 'Grow More Wheat' campaign to increase exports.

Expenditure from loan funds was cut by half during 1930, thus accentuating the fall in business activity. Difficulties in redeeming the overseas short-term debt caused Scullin to agree to a mission, led by Sir Otto Niemeyer from the Bank of England, to examine Australia's public finances.

Scullin brought down his first budget on 9 July, only hours after Theodore resigned from cabinet following the release of a Queensland royal commission report which cast doubt on his probity, in that while State premier in 1922 he profited through the purchase by the government of mines at Mungana.

The budget increased income tax and postal charges and introduced sales tax. Scullin planned to increase expenditure compared with 1929-30, while claiming the budget would balance.

Two Controversial Decisions

In August at a special premiers' conference in Melbourne Niemeyer expounded his solution for the crisis—to reduce wage rates and government expenditure, including social service outlays. Scullin subscribed to the Melbourne agreement to balance budgets, and was denounced for so doing by Labor leaders in Sydney.

As unemployment rose over 20 per cent in September argument intensified between advocates of Niemeyer's deflationary policy and those who wanted to expand credit to finance public works programmes to provide jobs for the unemployed.

While argument raged over the Melbourne agreement Scullin made two more controversial decisions, to renew Gibson's term as chairman of the Commonwealth Bank Board and to attend the Imperial Conference in London.

While he was absent (25 August until 6 January 1931) he secured the appointment—not without conflict with King George V—of Sir Isaac Isaacs, the first Australian-born governor-general.

He claimed to have persuaded the British government to drop plans to abandon an Imperial preference tariff in favour of Australian wine, dried fruits and sugar, and was able to get Britain to agree to reduce the Commonwealth government's annual interest payments by £1.6 million.

Scullin had not intended Federal parliament to sit during his absence, but it had to do so because of the constantly worsening financial crisis.

On 25 October Lang, who repudiated the Melbourne agreement, won the New South Wales election, exacerbating noisy arguments in caucus between the 'inflationists' and the supporters of the Melbourne agreement.

The absent Scullin supported his acting prime minister J. E. Fenton and acting treasurer J. A. Lyons, but expenditure cuts of only £1.3 million were implemented, compared with the £4 million planned by Lyons.

His Return

On his return, on 26 January Scullin persuaded caucus to reinstate Theodore as treasurer. This offended Fenton and Lyons who on 4 February resigned from cabinet before joining Labor's opponents in the newly created United Australia Party.

On 31 January Labor lost a Sydney by-election (Parkes) caused by (Sir) Edward McTiernan's elevation to the High Court of Australia against Scullin's wishes. In February another special premiers' conference was marked by total disagreement between Scullin and Lang over a Depression policy.

Scullin supported Theodore's plan, which relied on substantial credit from the Commonwealth Bank. Lang urged the repudiation of overseas interest payments and reduction of interest to 3 per cent on government borrowings in Australia.

When Lang's supporter E. J. Ward won a Federal East Sydney by-election (7 March) Scullin ruled him ineligible to join caucus as he had been returned on a State, not Federal, Labor economic policy. Ward and other Lang followers thereupon joined a group led by J. A. Beasley, a former minister, which held the balance of power in the House of Representatives.

Gibson then refused to grant Scullin further credit unless he reduced pensions, which he declined to do. So the government approved a note issue of £18 million, requiring special legislation. On 27 March a federal conference of the A.L.P. expelled Lang's branch. Days later, Lang defaulted on interest due to the Westminster Bank.

When Scullin paid the interest but took steps to recover the money from New South Wales, the Commonwealth Bank then had to negotiate a merger with the Government Savings Bank of New South Wales, to stem a run on its deposits. On 17 April the Senate rejected the fiduciary notes bill and the problem of meeting overseas short-term debt interest reached crisis point.

Scullin attempted to ship gold to London for this purpose, but again the Senate rejected the necessary bill and he was faced either with defaulting—which he had vowed never to do—or coming to terms with the Opposition and accepting further expenditure cuts.

A Disasterous Election

The result was the premiers' conference of May-June 1931, which agreed to restructure Australia's public finances on the 'equality of sacrifice' principle.

Australian resident bondholders accepted a 22.5 per cent cut in their interest, and all adjustable government expenditure, including salaries and pensions, was cut by 20 per cent to help balance budgets.

Lang agreed to this plan, as did the Federal Opposition, whose leaders attended some of the conference's later sessions, but it divided caucus: half Scullin's party later voted against the plan in parliament, although he persuaded both the federal executive and a special federal conference that the Premiers' Plan was essential.

The Opposition kept its part of the bargain and the Senate passed legislation to authorize the shipping of gold. The plan had allowed for some expansion of Commonwealth Bank credit, but Scullin had limited success in persuading Gibson to relent.

The bank released a further £2.8 million instead of the £5 million requested by Scullin, but some further credit provided a bounty on the 1931-32 wheat crop.

The plan bought Scullin a few months of relative calm, an internal conversion loan was successful and interest rates continued to fall. Governments began to reduce their deficits and wool and wheat prices briefly rallied.

In November Lang chose to eject the Scullin government and so remove Theodore from Federal politics: Lang's Federal supporters accused Theodore of corruption in distributing unemployment relief. Beasley demanded an inquiry. Scullin refused. So the Beasley group joined with the United Australia Party, led by Lyons, to vote Scullin out of office.

Although he fought a vigorous campaign, making much use of radio, the election of 19 December was a disaster for Scullin. His party won only fourteen seats. He fared worst in New South Wales; only in Queensland was there a swing to Labor. Lyons succeeded Scullin as prime minister on 6 January 1932.

Leader of Opposition

Scullin's reputation as prime minister has suffered at the hands of polemicists who ignore some of the financial problems facing him, problems not of his making. Much of the damage to the economy had been done before he entered office.

Had the Bruce-Page government followed his earlier advice about curbing overseas borrowing and reducing the trade deficit Australia would have been better placed to face the world-wide economic catastrophe.

Scullin had always known that a borrower nation could not afford to repudiate overseas debt obligations, but he also opposed cuts in social welfare and wages.

By mid-1931 these twin aims had become incompatible, because the Commonwealth government's London creditors refused to extend further credit unless Scullin made the cuts needed to achieve a balanced budget, and because the Senate blocked his gold-shipping alternative.

Scullin took deficit budgeting to the limit of what was politically possible. The Premiers' Plan was politically inevitable; as J. M. Keynes said, it 'saved the economic structure of Australia'; and it was overwhelmingly endorsed by voters at the 1931 election.

Seven who had been ministers, including Theodore, lost their seats at this election. No one in caucus could challenge Scullin's leadership. As an Opposition leader he was weakened by small numbers and the battle with Lang.

Scullin tried to take a middle position in the contest between Lyons and Lang which led to Lang's dismissal from office and his 1932 election defeat. Scullin welcomed the action taken by Lyons in May 1932 to allow the reserve against the note issue to be held in either sterling or gold.

Thereby conservatives began to change the rules of public finance which they had adhered to rigorously while in opposition so as to coerce Scullin. He consistently defended his tariff, notably in debating the Ottawa agreement: in the event, his tariffs of 1929-31 were only marginally reduced.

He deserves much of the credit for persuading Lyons to abandon a proposal in September 1932 to reduce the old-age pension from 17s. 6d. to 15s. a week. A year later he objected to Lyons reducing taxation in preference to increasing pensions.

He heavily emphasized banking reform, making this the centrepiece of his election campaign in 1934. Although he did not advocate bank nationalization, in speeches and articles he urged major changes in the banking system to bring it under firm government control.

Mainly at his instigation the federal Labor conference in 1933 adopted as an objective 'complete control of banking and credit … in the hands of the people'.

World War II

Much of Scullin's time was occupied with the unpleasant task of trying to reconcile the two Labor parties in New South Wales. No progress had been made by the Federal election of 1934, which was a more crushing disappointment to Scullin than its predecessor.

His party gained four seats, but its share of the vote fell slightly. Scullin's health was failing, and he did not take part in a crucial by-election (Newcastle) in June 1935 which marked the beginning of Federal Labor's resurgence in New South Wales. On 1 October he resigned the leadership to John Curtin.

In the remaining pre-war years Scullin stayed in the background, rarely speaking in parliament. He made his biggest impact in persuading the government to expand the scope of the Commonwealth Literary Fund. A member of its committee, he assessed manuscripts for possible fund support.

Scullin strongly endorsed the Menzies government's decision to go to war in September 1939. He had much to say about war finance and probably could have gained a portfolio in Curtin's cabinet, had he wanted. He occupied an office between Curtin and J. B. Chifley. He helped in various capacities, for example, as chairman, from April 1942, of the Press Advisory Committee on Censorship.

Early in 1942 he was one of the three-member Commonwealth committee on uniform taxation. Following this committee's report, widely differing State taxes on income were replaced by a uniform Federal tax; Scullin made some of the most important contributions to the debate in May 1942 on the four requisite bills.

Although ill, he attended a caucus meeting on 9 December 1942 to help Curtin to defeat a move by A. A. Calwell to overturn the government's conscription plan.

Last Years

In 1943-44, after recovering from serious illness, Scullin was a member of a joint parliamentary committee which recommended the 'pay-as-you-earn' system of income tax collection, which was quickly accepted by parliament.

He was active in the 1946 election campaign and thereafter Chifley entrusted him with a few minor tasks. After his last parliamentary speeches on 8 May 1947 he was usually absent ill until he retired in December 1949.

In 1951 an Australian Industries Development Association fund raised nearly £4400 in recognition of Scullin's work while prime minister in protecting Australian industries. It increased his financial assets by one half, and he invested most of it in Australian companies.

Survived by his wife, Scullin died on 28 January 1953. He was given a state funeral and was buried in Melbourne General cemetery: Archbishop Mannix presided at a requiem Mass in St Patrick's Cathedral.

Over his grave a tall granite Celtic cross was erected, on behalf of the Australian labour movement. His portrait by W. B. McInnes hangs in Parliament House, Canberra.